OUR VIEW: Closing time for realty fee

This artwork by Matt Wuerker relates to the booming housing market and real estate investments.

At a town hall meeting last week, Gov. Chris Christie said that he'd like to abolish realty transfer fees in New Jersey. He's not the only one.

"People are leaving, and then the great gift: 'Oh yeah, you're going to leave us? We'll take 5,400 bucks from you on the way out the door. Thank you very much,' " Christie said. "It makes no sense."

This tax, which has been around in some form for decades - both here and in most states - is onerous and should be eliminated. Unfortunately, it is unlikely that the tax revenue-addicted state Legislature will lift a finger to make it happen.

The realty transfer fee is in reality a tax levied on New Jersey residents when they sell their homes. How much they have to fork over is based on a home's sales price. What was once a tiny charge is now, after nearly four decades of steady increases, a substantial tax. Sell your home for $300,000 - the median sale price in the state last month - and you'll owe the New Jersey tax man a hefty $1,700.

It is not surprising that the New Jersey Association of Realtors supports the move to abolish the tax. The association opposed increases in the fee back in the day.

Increases in the realty transfer fee were approved in 2002 and 2005 under previous administrations. During those years, the housing market was booming, and homeowners either had equity in their homes or could build it faster.

However, once the economy collapsed, it was clear that the realty transfer fee was a true burden on many home sellers and should be eliminated. The problem is the fee brings in a lot of money. It is a cash cow, the seventh-largest source of tax revenue for the state.

Of course, it is one thing to champion the elimination of a tax, and quite another to come up with ways to make up the lost revenue. Christie did not say how he'd make up the revenue if lawmakers actually passed a bill that made the fee a thing of the past. That is the next, albeit difficult, step that Christie must take if he is serious about this proposal, which so far has been an applause line to drop into town hall appearances.

It will take the governor's much-vaunted abilities to reach across the aisle and find common ground in order to get the job done.

This would be an opportunity for Trenton to actually benefit homeowners, rather than merely pick their pockets when they move. As the state Department of Taxation so helpfully puts it: "Payment of the Fee is a prerequisite for recording the deed."

Translation: "Selling your house? Pay up." It is time for the state to get out of this extortion racket.

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OUR VIEW: Closing time for realty fee

At a town hall meeting last week, Gov. Chris Christie said that he'd like to abolish realty transfer fees in New Jersey. He's not the only one.

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